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Dive Brief:

Constellation Brands has purchased a minority interest in the Copper & Kings American Brandy Co., an independent distiller of brandy, absinthe and gin products, according to the Kentucky Distillers' Association. Financial details were not announced.

"Copper & Kings has a fiercely independent streak," Bill Newlands, Constellation's executive vice president and chief operating officer, said in a statement. "Their entrepreneurship and focus on premium high-end craft spirits aligns closely with our strategy of delivering what the consumer wants. Copper & Kings is scalable not only in equity, but also the inventory of aged and aging spirits on hand. We see our role as adding fuel to their fire. And we think it’s going to burn very bright."

Dive Insight:

Brandy has become the "quiet giant" of the U.S. liquor industry, according to The New York Times. In 2016, more than 13 million cases of brandy — eight million of them American brands — were sold in the U.S.

The alcohol's trendy new status has brought makers such as Christian Brother and E&J Brandy renewed consumer interest, pushing them to roll out new products, according to the paper. At the same time, regional distillers of other craft spirits have recognized the category's growth potential and are adding brandies to their beverage portfolios.

Given this climate, Constellation's deal with Copper & Kings looks to be a savvy investment and one that could foster long-term rewards. The spirit's newfound popularity is largely due the revival of classic cocktails such as sazeracs, sidecars and old fashioneds at bars and restaurants. The alcohol is a great base for a broad range of cocktails, though it has been replaced with different spirits over the years.

The U.S. rum market also is performing well and posted the third-highest sales volume in the industry in 2016, just behind vodka and whiskey, according to the most recent data from Statista. This is good news for Constellation's move with Real McCoy Spirits.

To help Copper & Kings and The Real McCoy grow, the beverage giant brings not just a welcome capital infusion but a wide distribution network, marketing expertise and a focus on premium brands. In recent years, the company has shed underperforming assets while acquiring brands such as High West Whiskey and Schrader Cellars. Market research also has shown that high-end selections across the beer, wine and spirits categories are outperforming mainstream ones and, in some cases, premium brand growth is more than double that of the standard category.

As craft distillery sales increase — nearly 6 million cases were sold in 2016, an 18.5% volume increase from 2015, according to Beverage Daily — investment in the spirits industry has surged. Between August 2016 and August 2017, the U.S. gained 1,589 new active craft distilleries, a 20% increase.

One thing is certain: Constellation's spirits segment needs a boost. The company's most recent earnings report showed a 10.3% drop in wine and spirit sales. Constellation said it now expects its wine and spirit sales for fiscal 2018 to come in on the low end of the 4-6% decline it previously estimated. Time will tell if its recent investments in Copper & Kings and The Real McCoy hit the spot, but for now it appears Constellation will continue to pursue premium brandy and rum producers as a source of growth.